Analysis and criticism of America's most prominent public intellectual and champion of Keynesian economics. I am part of the Austrian School of Economics, and I critique Krugman's writings from that perspective.

I’d argue that Mr. Gingrich is wrong about that: proposals to guarantee health insurance are often controversial before they go into effect — Ronald Reagan famously argued that Medicare would mean the end of American freedom — but always popular once enacted.

Krugman's point is that if an entitlement is "popular," then any argument about "freedom" is irrelevant. Now, I can understand why a Medicare benefit might be popular, since it involves people receiving care for which they do not pay. To give an extreme but pertinent example, I am sure that when Hitler's regime stole the property of wealthy Jews and gave it to politically-connected Nazis, that the program was popular with those who received the benefits, yet no one is going to accuse Hitler's regime of enhancing freedom.

One of the traditional methods of imposing statism or socialism on a people has been by way of medicine. It's very easy to disguise a medical program as a humanitarian project. . . . Now, the American people, if you put it to them about socialized medicine and gave them a chance to choose, would unhesitatingly vote against it. We have an example of this. Under the Truman administration it was proposed that we have a compulsory health insurance program for all people in the United States, and, of course, the American people unhesitatingly rejected this.

Reagan added:

The doctor begins to lose freedom. . . . First you decide that the doctor can have so many patients. They are equally divided among the various doctors by the government. But then doctors aren’t equally divided geographically. So a doctor decides he wants to practice in one town and the government has to say to him, you can't live in that town. They already have enough doctors. You have to go someplace else. And from here it's only a short step to dictating where he will go. . . . All of us can see what happens once you establish the precedent that the government can determine a man's working place and his working methods, determine his employment. From here it's a short step to all the rest of socialism, to determining his pay. And pretty soon your son won't decide, when he's in school, where he will go or what he will do for a living. He will wait for the government to tell him where he will go to work and what he will do.

Indeed, what we have seen in the last four decades has been the disconnect between doctor and patient, as the doctor is governed by federal oversight, the Drug Enforcement Agency, Medicare "cost controls" from Medicare, insurer oversight, and the trial lawyers. Second, the nature of taxation is this: if government provides benefits to one group of people by taxing another group of people, then the people who are taxed do lose some of their freedom.

Am I exaggerating? Has any reader ever been subjected to an Internal Revenue Service audit, or known anyone who has gone through that experience? Who is the master and who is the servant? Does this relationship enhance or diminish freedom?

Don't kid yourselves. We are less free today, as the government has ordered everyone to have health insurance, or else face the wrath of the IRS. Krugman may call that freedom, but I call it coercion and yet another example of the master-servant relationship we have with our government.

Granted, Krugman is speaking of what "Progressives" call "Positive Freedom" in which government forces others to provide a benefit to someone, when then does not have to pay directly for the largess. According to Krugman and others, that person if "more free" because he or she now can direct income elsewhere. However, that is "freedom" gained at the expense of other people, who now are less free.

Guy Rexford Tugwell, one of the most important advisers to President Franklin Roosevelt, acknowledged in a 1968 article in The Center Magazine:

The Constitution was a negative document, meant mostly to protect citizens from their government.... Above all, men were to be free to do as they liked, and since the government was likely to intervene and because prosperity was to be found in the free management of their affairs, a constitution was needed to prevent such intervention.... The laws would maintain order, but would not touch the individual who behaved reasonably.

To the extent that these new social virtues developed [in the New Deal], they were tortured interpretations of a document intended to prevent them. The government did accept responsibility for individuals’ well-being, and it did interfere to make secure. But it really had to be admitted that it was done irregularly and according to doctrines the framers would have rejected. Organization for these purposes was very inefficient because they were not acknowledged intentions. Much of the lagging and reluctance was owed to constantly reiterated intention that what was being done was in pursuit of the aims embodied in the Constitution of 1787, when obviously it was done in contravention of them. [Emphasis mine.]

Now, to be fair, Krugman is not writing about the U.S. Constitution, but instead is claiming that expansion of the tax-funded welfare state enhances freedom. Yet, it also is clear that such "Progressive" notions also clash with the idea of freedom as the Founders of the United States saw it. (My guess is that Krugman would call them "racists" and say whatever they believed is not relevant in the 21st Century.)

As I see it, Krugman's definition of freedom is like saying that a situation in which bullies steal the lunch money of schoolchildren increases freedom because the bullies now are free to spend their other income on whatever they please instead of buying food. Unfortunately, like most "Progressives," Krugman believes that the master-servant relationship of government to the people promotes the Good Society. I look at it and see the expansion of outright slavery.

1 comment:

Also, another hindrance to our freedom is the education system in this country. As the Texas Board of Ed is showing us, and you demonstrate daily, political beliefs have invaded the classroom, and this is wrong in a free country.

You claim this blog uses Austrian economic theory to refute Krugman, but thus far I have read little analysis, little theory, and, absolutely no ideas or solutions (but a lot of childish bickering!). To invoke ‘jihad’ and refer to Hitler to stir up fear and cynicism during your crusade to discredit and embarrass a fellow professor, a fellow economist, and a fellow American is disturbing. I use to wonder why respectful disagreement has disappeared in our country, and its because disrespectful disagreement is encouraged by professors at our universities!

Sir, I do not disagree with many of your points of view and your right to air them, but I have serious issues with your methods, particularly because you are guilty of many of the things you accuse Krugman of. I would expect these kinds of posts from an ignorant tea partier or liberal elitist blogger, not a college professor

Since you are a professor at one of our universities, I hold you to a higher standard. It is maddening you (and Krugman) are educating our youth, and I can assure you no child of mine will ever attend Frostburg State (or Princeton). Good Day.

About Me

I teach economics at Frostburg State University in Frostburg, Maryland. We are located on the Allegheny Plateau, and we have cool summers and tough winters.
I am the single father of five children, four of them adopted from overseas and I have two grandchildren. My family and I are members of Faith Presbyterian Church (PCA).